By Victor Reklaitis and Barbara Kollmeyer, MarketWatch

Jobs report may be leading to a 'Goldilocks' period for investors

NEW YORK (MarketWatch) -- U.S. stocks erased early losses and climbed higher Monday, as the Dow industrials gained more than 150 points.

The stock market's switch to rally mode was pinned on bets that the Federal Reserve will move more slowly in raising interests rates given Friday's disappointing jobs report.

The S&P 500 (SPX) was last up about 18 points, or 0.9%, to 2,085, while the Dow Jones Industrial Average (DJI) gained 156 points, or 0.9%, to 17,919 after dropping more than 100 points out of the gate. The Nasdaq Composite (RIXF) added 34 points, or 0.7%, to 4,921.

The "dismal" jobs report, which came out while the market was closed for Good Friday, and a Monday speech by New York Fed President William Dudley were helping stocks advance, said Peter Cardillo, chief market economist at Rockwell Global Capital. Dudley reiterated the central bank's mantra that it will be data dependent in deciding when to raise rates, Cardillo told MarketWatch.

"That renews the theme of lower interest rates for six to nine months," Cardillo said.

Read more: Fed's Dudley signals go-slow approach to rate hike (http://www.marketwatch.com/story/feds-dudley-signals-go-slow-approach-to-rate-hike-2015-04-06)

The disappointing jobs report could result in a "Goldilocks" period for investors, said Michael Jones, chairman and chief investment officer at RiverFront Investment Group, in a note Monday. "We believe that financial markets, perhaps after some volatility, will eventually celebrate the combination of economic growth hot enough to avoid recession, but not hot enough to force the Fed to tighten policy in the near future," Jones said. Market watchers also talked about Goldilocks-type economic data last year (http://www.marketwatch.com/story/this-may-well-be-the-goldilocks-jobs-report-for-the-market-2014-10-03) and in 2013 (http://blogs.marketwatch.com/capitolreport/2013/12/09/experts-see-goldilocks-economy-in-2014/).

Also see: After jobs report, investors pencil in December rate hike (http://www.marketwatch.com/story/after-jobs-data-investors-pencil-in-december-rate-hike-2015-04-06)

In other U.S. economic news on Monday, the latest reading for the Institute for Supply Management's nonmanufacturing index was slightly better than expected (http://www.marketwatch.com/story/ism-services-index-dips-in-march-but-shows-steady-us-growth-2015-04-06), showing a dip from the prior month but still indicating steady U.S. growth.

Later this week, Alcoa Inc. (AA) will provide the unofficial start of first-quarter earnings season with its report Wednesday after the close.

Individual movers:Transocean Ltd.(RIG) was the S&P 500's biggest gainer as a jump in crude-oil prices (CLK5) lifted oil-field-services stocks.

Hudson City Bancorp.(HCBK) was the S&P's biggest decliner after the company announced a delay again for its planned merger with M&T Bank Corp.(MTB)

Read more about Monday's jumpiest stocks in the Movers & Shakers column (http://www.marketwatch.com/story/herbalife-sinks-on-reports-of-probe-uniqure-soars-on-bristol-myers-deal-2015-04-06)

Other markets:May crude oil (http://www.marketwatch.com/story/oil-rebounds-as-iran-exports-seen-taking-months-to-ramp-up-2015-04-06)(CLK5) settled 6.1% higher, helped by signs of higher Asian demand and analysts saying it could take months before last week's Iranian nuclear deal spurs more crude supply from that country. Gold futures (http://www.marketwatch.com/story/gold-draws-buyers-as-stocks-drop-2015-04-06)(GCK5) also finished higher, getting a lift from the soft jobs report.

The dollar (DXY) was up slightly (http://www.marketwatch.com/story/dollar-steady-against-yen-after-sliding-on-jobs-data-2015-04-06) after slipping Friday in the wake of the weak employment data. In Asia, several markets, including those in China and Hong Kong, were closed for a holiday, while Japan's Nikkei 225 finished down 0.2%.

European markets are closed until Tuesday. Rockwell Global's Cardillo cautioned that Monday's action in the U.S. stock market could be skewed by light trading as overseas investors remain on vacation.

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